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5.28 p.m.

Lord Bethell rose to call attention to the problems faced by the inhabitants of Gibraltar; and to move for Papers.

The noble Lord said: My Lords, I am grateful indeed to the fickle finger of fate which drew this particular topic out of the hat at such an opportune moment because the question of Gibraltar has been in the news on many occasions in recent days and has been raised

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and discussed in another place. Gibraltar has been on the agenda at meetings between the Foreign Ministers of Spain and the United Kingdom and will be discussed in the latest round of the Brussels process on, I believe, 10th December. It will be the first time for a number of years that those in Brussels have assembled for that purpose.

The question of Gibraltar has rumbled on for nearly 300 years since the Rock came into British possession in 1704. Since that situation was ratified by the Treaty of Utrecht in 1713 Spain has tried to repossess the Rock on many occasions by many means, including force. In recent times the use of force has been renounced by Spain. In 1967 Mrs. Judith Hart, speaking for the then British Government, said that there would be no change in British control over Gibraltar without the freely expressed wishes of the inhabitants of that territory. Of greater importance than any of these declarations or agreements is Article 73 of the United Nations Charter which provides that on any question of decolonisation of any territory owned by a colonial power the wishes of the inhabitants of that territory must be paramount.

Sometimes we forget that it is the people of Gibraltar who have the final say. I do not believe that that point has yet been taken on board in Madrid. In recent years, particularly since joining the European Community, as it then was, Spain has used every chance to undermine Gibraltar's links with the United Kingdom. It has not tried to do so with a single blow of an axe. Spain believes that it will take many years before it can achieve its ends. It envisages a process of a thousand tiny cuts that will sever the cords that bind the Rock to the mother country. Economic decline may be imposed on Gibraltar in such a way as to put pressure on its people to accept Spanish rule at some stage. The sheer inconveniences may become so burdensome that they will give in and ask Britain to negotiate a deal with Spain. Madrid believes that eventually the Rock will drop into Spain's lap like a ripe plum.

The question of air liberalisation is perhaps the longest running of these European points. It came to a head 10 years ago over the air liberalisation agreement. One remembers that at that time there was talk of a "Basle-Geneva" solution which would enable people who landed at Gibraltar airport to go straight into Spain without passing through customs and immigration, as happens in those two Swiss-French joint airports. There would be nothing wrong with that were it not for the fact that Spain claims the territory of the airport. There is certainly nothing wrong with it as between Switzerland and France at Basle or Geneva, but there is a problem about it as between Gibraltar and Spain because of the territorial claim. One realises that Spain wishes to have not just joint use of Gibraltar airport for civil passenger traffic but joint air traffic control and joint right of access for their aircraft without passing through immigration control on the Gibraltar side. All of this, if it were conceded, would be trumpeted abroad in Spain as "progress"--a step along the road to a change in sovereignty.

Since the people and Government of Gibraltar have refused to ratify that agreement, Spain has refused to allow any of its own carriers to fly into Gibraltar or any

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carriers from outside Spain, Gibraltar or Britain to use the airport either. Spain leans on airlines such as Lufthansa and KLM so that they are not allowed to use Gibraltar. This means that Madrid, Frankfurt and Amsterdam cannot be used by the people of Gibraltar as a hub. If anyone wants to fly to anywhere in Europe or outside Europe the flight must be made to London and then from London onwards. The message from Madrid is always the same: sign the air traffic agreement and give Spain its progress and step towards change or suffer the economic consequences.

Times have changed since the majority of the workforce on the Rock worked in the dockyards for the Ministry of Defence. Gibraltar is a small place the size of Andover in population. It has 30,000 inhabitants. They must maintain their mini-economy. If they do not I do not know to what extent the mother country will come to their aid. Clearly, there is no limitless amount of money here in the form of aid for them.

One must also consider the external frontiers convention and the Schengen agreement, which was raised in another place yesterday. Whenever a matter of controversy within the European Union arises it is seized upon by the Spanish side and used to try to obtain some concession over Gibraltar. In the case of the external frontiers convention Madrid seeks to make the point that Gibraltar is not part of the European Community for immigration purposes. If Spain could achieve that it would be a victory, but it would be quite erroneous and unfair because Gibraltar joined the European Community in 1973 with the United Kingdom, 13 years before Spain joined.

The question of tax harmonisation has also been mentioned. I gave notice to the noble Baroness that I would raise this matter. I hope that she will be able to reassure the House that any move towards tax harmonisation will not be used by the European Union under Spanish insistence by a majority vote of the European Parliament, followed by a qualified majority vote of the Council of Ministers, to do away with the use of Gibraltar as a financial centre. Since the run-down of MoD facilities on the Rock, Gibraltar has had to build up alternative means of earning a living, and its development as a financial centre has been one of those methods. I hope that the Minister will wish it every success and protect it.

The land frontier with Spain used to be the front line of conflict, and it is still a serious matter. The flow of traffic across the frontier is turned on and off, rather like the traffic between West Germany and West Berlin was turned on and off by the Soviets in the bad old days. The British have suggested that there should be a red and green channel system. Spain has turned down that idea. It allows traffic to cross only in single line, and it depends on the mood of Madrid or the governor of Cadiz. As far as one understands it, the present governor is better than his predecessor, Mr. Cesar Brana, who liked building up long queues at the frontier. There can be no doubt that the system of one-lane traffic lends itself to queue-building. This is done whenever Madrid feels in a bit of a bad mood. The ability to tighten the bottleneck is there and can be used at any time.

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There are inadequate manning levels and queues of an hour have been quite frequent in recent days. In the past year or two delays could be for as long as four or five hours. If the frontier is unreliable it stands to reason that people will not use Gibraltar for tourism for fear of missing their flights home, and Gibraltar's economy is to that extent undermined.

Another problem imposed by Spain is that it will not allow commercial goods to cross the frontier except between 0800 hours to 1530 hours Mondays to Fridays and at weekends not at all. If one wants to go by taxi, one has to get out of one's taxi at the frontier and get another taxi across the line. When one thinks of how normal it is to take a taxi or vehicle across any other European frontier, even to Hungary, Poland or Slovakia, which are not in EU, one wonders why such a situation is tolerated by the authorities in Brussels and the Commission. Indeed I believe that the Swedish Commissioner was shocked when she visited that frontier a month ago. She protested vociferously about it.

There is also a problem with telephone communications. Spain will not accept the international code used by Gibraltar, and the telephone numbers used by the people there are running out. Again, that is a threat to the financial centre.

I have two points to put to the Government. On 10th December, there will be a bilateral meeting. Some people believe that it should be a trilateral meeting, because the people of Gibraltar have just as much, or perhaps more, need to debate the issue as Spain or the UK. Will the Minister assure me that Mr. Peter Caruana, the Chief Minister of Gibraltar, will be invited to Brussels, and that if he goes--the question of his attendance is controversial on the Rock--he will not go as the British Government's nominee or plaything but in his capacity as the elected representative of Gibraltar and the protector of its interests which, according to the UN Charter, are paramount? The interests of the people of Gibraltar are paramount.

I hope that the Chief Minister will not be asked to leave the room when the subject of sovereignty is raised, which it must be, of course, under the terms of the 1984 Brussels agreement. In that context I have to say that a comment made in this House on 24th October by the noble Lord, Lord Whitty, about bilateral discussions has caused some concern on the Rock.

My final point relates to the EU in general and the consistent use by Spain of negotiation to try to make progress. Gibraltar needs representation in the EU institutions. At the moment it has no one to look after its interests. It has no one in the Commission who is charged specifically with looking after Gibraltar, and no one in the ECJ, of course. On the Council, in theory, yes. Britain, as a member of the Council of Ministers, looks after Gibraltar, but there can sometimes be conflicts of interest between ourselves and that small territory.

Why is no Member of the European Parliament charged with looking after the people of Gibraltar? Why are the 30,000 people of Gibraltar the only people in the Union of 400 million people who are not allowed to

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vote in European elections? When this matter was raised nearly 20 years ago, governments pointed out to me that it was difficult to accommodate Gibraltar within the single member system, but a Bill has been introduced. Cannot the Government see fit to accommodate the 30,000 people, of whom 13,000 or 14,000 are voters, in the June 1999 elections to the European Parliament? There is concern about all those points on the Rock. I was there last week. I hope that the Minister will be able to cast some oil on those troubled waters. I beg leave to move for Papers.

5.45 p.m.

Lord Janner of Braunstone: My Lords, it is a tremendous honour and pleasure to take my place in your Lordships' House. I am sad that my noble father and my mother whom many noble Lords knew well are not here to enjoy this occasion. As noble Lords may be aware, I succeeded my father in Leicester West and Leicester North-West, and now here. That is a unique record. It is so unique that my son has suggested that this House might introduce a hereditary peerage by precedent. As that is unlikely, he has, alas, to fight his own way up, especially from the other side of the House. I am--I hope your Lordships will not mind me saying so--sad that my wife passed away last year. She would have enjoyed this so much, and so it is doubly important to me that I have so much support, affection and help from my children, my family and my friends.

I am happy to be here, but the people who are most responsible for that are the citizens of Leicester North-West and later Leicester West, especially perhaps those of Braunstone. I hope that they are happy to share their name with me. That is an area of Leicester which I have been most happy to serve for 27 years. Those people have needed that service more than most. I have there many friends, including my agent Janet Setchfield for all those years, and I also salute the present Lord Mayor of Leicester, Councillor Ray Flint.

The subject today is one which is dear to me. I have been to Gibraltar many times. It is extraordinary--is it not?--that a place with just 30,000 souls could produce so many distinguished leaders: Sir Joshua Hassan, whom I knew well and I liked greatly; the former Chief Minister Joe Bossano and Peter Caruana whom I consulted before making the suggestion that I shall make to the House.

I listened, of course, with much interest to the noble Lord, Lord Bethell. I shall not add to his criticism of the miseries imposed upon the people of Gibraltar by those of Spain. I have spent a great deal of time in Spain. I know the country well. As a youngster I spent months there. I learnt to speak its language. Under sufficient provocation or wine, I could even sing in Spanish. It is a country I like enormously. I have been involved a little in its political life. I went with some Members of the other place once long ago to keep Felipe Gonzalez out of Franco's prison. So I cannot be accused of being anti-Spanish. I just believe that on this issue they are totally, absolutely and permanently wrong.

It is clear from long years in politics that if people think they will get somewhere, they will keep on doing improper, difficult and nasty things in the hope that one

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day the other side will give in. If we are to convince the Spaniards that they might as well give up behaving in the way that the noble Lord has described, we have to convince them that it is a purposeless exercise, and that they might as well give up now and live in peace with their neighbours.

How do we convince them? I share the noble Lord's anxieties about what might happen in Gibraltar. My impression is that the entire population, from whatever background, are absolutely determined that under no circumstances whatever will they become part of Spain. The belief that if you make their lives miserable enough by harassing people at the border, by making difficulties at the airport, or in the other ways so ably described by the noble Lord, that result will be produced is just wrong.

How then can we convince the Spaniards? I have a suggestion which I first came across many years ago when I was a law student at Harvard Law School. It comes from the precedent set by the US which, a century ago, started sending what they call territorial delegates to their Congress. They have people who are appointed or elected who are Members of their Congress, but they have different rights. They do not have the right to vote in Congress. But they do have, after much discussion and constitutional change, the right to vote in committees. They have the right to take part in debates, and to do precisely what the noble Lord, Lord Bethell, was saying that Chief Minister Caruana should do in Brussels: express the feelings and the views of the people who inhabit those territories.

I ask the Government to be good enough to look at the possibility of a minor constitutional change which would enable the people of Gibraltar, and possibly those of other dependent territories, to send and--it is to be hoped--elect a person to come to this Parliament. It is possible that it would be best for such people to be delegated to the other place. However, while sitting here, it occurred to me that it might be equally useful and important for them to be delegated or elected to attend this House where they could put forward their views.

That would have two results. First, the people of Gibraltar would feel that they are heard. They would have elected a person to express their views in the Parliament which, after all, decides upon their future. Secondly, it would be the clearest possible signal to the Spaniards that there is no way under which they can under any circumstances, and by any manner of harassment whatever, incorporate the Rock of Gibraltar with the mainland of their country.

There is a song which I learnt, which says:

    "Espana--no hay mas que una"--

there is only one Spain. But, it is also true that:

    "Gibraltar--no hay mas que una"--

there is only one Gibraltar. It is a place of which we should be proud. It is a community of communities of different backgrounds and ethnic origins living and working together in extraordinary harmony. It is a community which wants to be part of the United Kingdom. I ask the Government to consider whether its

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people's wishes could not be put to some effect and the correct signal given to the Spaniards by allowing it to send a delegate or a Member to our British Parliament.

5.52 p.m.

Baroness Hooper: My Lords, it is the first time that I have spoken immediately following the maker of a maiden speech. Therefore, it is also the first time that I am able to comply with the very pleasant duty and tradition of the House of Lords of offering congratulations on behalf of the whole House. After such a splendid speech, it is very easy to congratulate the noble Lord, Lord Janner of Braunstone, on it, and to thank him for his very well-informed contribution. Gibraltar is a subject close to his heart. I express the hope that we shall hear from the noble Lord on many occasions in the future and on many different subjects. The noble Lord's reputation for championing causes goes before him, and therefore we feel sure that the people of Gibraltar will welcome the fact that he made his maiden speech on that subject.

I also thank my noble friend Lord Bethell for giving us the opportunity again to debate Gibraltar. Several Questions have recently been tabled on the subject and the Minister is, I suspect, rapidly becoming a considerable expert on such matters. We also had a more general debate on the dependent territories in July when a number of contributions referred to the situation in Gibraltar.

There are so many issues, but I wish to concentrate on three main ones. My noble friend covered many of them. I, too, will dwell on elections to the European Parliament. It seems wrong that the people of Gibraltar have no opportunity to vote, even though Gibraltar is a full member of the European Union. When I was a Member of the European Parliament after the first direct elections in 1979, I was happily one of the six British Members involved. There were three Conservatives, led by my noble friend Lord Bethell, and three Labour Members who were asked by the Government of Gibraltar, in the form of the then chief Minister Sir Joshua Hassan, to represent the interests of the people of Gibraltar.

In those days we were talking about the possibility of perhaps adding the votes of the Gilbraltarians to Hampshire East and the Isle of Wight, as an appropriate place. I would have been very happy to have their votes in Liverpool, in which case I might have won the election the next time round. Nevertheless, it seems extraordinary that the issue still remains unresolved, particularly when we know that people of the French dependent territories in places as far flung as Guadeloupe and Reunion are represented in the European Parliament. Certainly all the people of those territories have the right to vote.

Equally, we must remember that the people of Ceuta and Melilla, the Spanish enclaves in north Africa, Morocco, also have the right to vote in the European elections when the people of Gibraltar do not. I certainly see the tabling of the Bill concerning the new form of election to the European Parliament, which I understand

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is before the House of Commons today--or perhaps it was tabled yesterday--as a vehicle for introducing change. If I know my noble friend Lord Bethell, aright, I feel sure that an amendment will be tabled in due course when the Bill comes before your Lordships' House, if it has not already been taken care of in the other place. I believe that that is a particularly important and current issue.

The second issue which I wish to dwell upon is the question of dialogue between Spain and this country, and indeed the people of Gibraltar. As our Foreign Secretary, Douglas Hurd, coined the phrase:

    "Two flags and three voices".

That worked to a certain extent, but even that relationship has now broken down. It is necessary to do something to break the impasse. I believe that the suggestion made by the noble Lord, Lord Janner, was extremely interesting. He may be amused to know that that was put forward at our dependent territories debate--that is, if we are looking at reform of the Houses of Parliament, especially the House of Lords--as a possible solution not only for Gibraltar but also for all the dependent territories. I know that Gibraltar feels that, in this day and age, it should have an equal voice and that it should be part of triangular discussions. I see no reason why, with goodwill on all sides, that that should not be possible.

I believe that my dilemma, like that of the noble Lord, Lord Janner, is that I love Spain. Indeed, I have many good Spanish friends. However, I also love Gibraltar and have many good Gibraltarian friends. There are many people who live in Gibraltar--Gibraltarians--who have many good Spanish friends and some of them have homes in Spain. It is those people who are perhaps most affected by the border problems to which my noble friend referred. Above all, it is essential that we improve the opportunities for dialogue because it must be at its lowest level for many years at present.

The third issue that I should like to raise relates to a suggestion that was put forward at a meeting addressed by the Chief Minister of Gibraltar, Peter Caruana, earlier this week in London. The suggestion related to the proposals for constitutional reform, constitutional modernisation, which the Gibraltar Government have put forward. The basis of the suggestion to break the deadlock is that the pill should be sweetened by all parties--namely, Spain, the United Kingdom and Gibraltar--and that they should agree to allow a United Nations sponsored referendum on sovereignty to be held on the Rock to test Gibraltarian opinion at intervals of not less than, say, 25 years. Such a solution, it was suggested, would keep Spanish hopes alive while at the same time encouraging them to exchange their present policy of harassment for one of good neighbourliness to encourage an eventual vote in their favour. If this were to be accepted as a way forward, Gibraltar would be able to enjoy both decolonisation and an end to Spanish harassment. Sovereignty would revert to Spain if, and only if, she managed to persuade a two-thirds majority to vote in her favour.

After something like half a century of Spanish harassment, and a long period when the frontier was closed during and after the Franco regime, I believe that

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a change of this kind would enable Gibraltarian opinion to be changed. Although it may be most unlikely that after this harassment Gibraltarian opinion would change in favour of Madrid, Madrid could always nurse the hope that in a changing world anything is possible. That suggestion was put forward and the chief minister acknowledged the fact that it was a possible way forward and indicated that he had no objection to the idea of a referendum. I think that he felt pretty sure of his ground. I put this suggestion to the noble Baroness. I hope that we may hear from her on that subject.

I believe that I have covered the three main issues that I wanted to deal with. I wish to refer, however, to the review of the dependent territories which is currently being carried out by the Government and which followed the tragic happenings in Montserrat. As I understand it, we are due to hear the results of that review next February at the debate organised by the Dependent Territories Association. However, it has been suggested that the review is considering all of the dependent territories--there are 13 in all--except Gibraltar and the Falkland Islands. I should be interested to have some confirmation of that and an explanation if Gibraltar is excluded from that review.

I refer again to my strong feeling that the dependent territories--this, of course, affects Gibraltar in the context of this debate--may find a solution within the Commonwealth. As a result of the Commonwealth summit which has taken place since our previous debate, new ways of looking at the Commonwealth and how it functions and how its networking applies, are being considered. Will the position of the dependent territories also be considered in that context because at the moment they do not have a direct voice in the Commonwealth; they have to speak via the UK Government? I know from my experience of attending a Commonwealth education ministers' conference and a Commonwealth health ministers' conference that some representatives of the dependent territories who attended were able to be present only as part of the British delegation. I believe that that irks them and it certainly irks Gibraltar.

Gibraltar is a democracy. The British Government have responsibility in respect of its defence, foreign affairs and internal security. It is also part of the European Union. It has a neighbour, Spain, and it has an incredible and unthinkable border problem. It is incredible and unthinkable in this day and age given that Spain, the United Kingdom, and Gibraltar as part of the United Kingdom, are all part of the European Union. I hope therefore that the Minister will be able to reassure us once again and the 30,000 people of Gibraltar that they have this Government's full support in carrying out their wishes to have as much independence as possible but an ongoing relationship with the United Kingdom.

6.5 p.m.

Lord Chesham: My Lords, I had thought that this Government were as solid as the previous government on the sovereign rights of Gibraltarians to their own destiny. Indeed they profess that that is the case. But

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what do we have? We have the Amsterdam Treaty triumphally heralded by the Prime Minister:

    "what we have secured, which is important and is a better way of going about things, is what I call an opt-in",

an opt-in which the Foreign Secretary described in the following way:

    "Britain lost out as the result of an error in discussions on border controls in the final stages of the talks in June".

This error effectively means that this Government inadvertently surrendered a valuable bargaining chip to the Spanish in their longstanding feud with Britain and the Gibraltarians over the sovereignty of Gibraltar. It is no wonder Gibraltarians are concerned.

A Spanish diplomat has been quoted as saying, on the opening of the Gibraltar office in Brussels,

    "If they are going to try to negotiate bilaterally with the Commission, then Spain will be very angry--Spain is not going to accept that. We have a right to be angry".

What right does it have to be angry? Gibraltarians are members of the EU whether Spain likes it or not, and in common with all members of the EU they are fully entitled to negotiate bilaterally with the Commission. Would Spain have a right to be angry if Scotland or Wales were to open an office in Brussels? Surely this Government, within the EU and on all occasions, must insist on Spain recognising the international telephone code of 350 for Gibraltar. Paradoxically, Spain recognises the international telex code. There seems to be no reason for this action other than pure harassment.

Spain must recognise international military and civilian air traffic to Gibraltar. Spain must clearly recognise Gibraltarian (EU) passports and ID cards and must apply the same rules on the freedom of movement of people and goods as it does for example at its borders with France and stop the ridiculous harassment at its borders with Gibraltar.

I am pleased to have seen and entirely support the reported strength of the Foreign Secretary's response to Spain over the NATO issue. I ask the Minister for her confirmation that Spain will not be admitted as a full member of NATO--as a supposed ally--until Spain admits that it has no legitimate demands over the sovereignty of Gibraltar and lifts its unacceptable barriers to the freedoms of Gibraltarians.

In relation to the suggestion that Spanish troops could be stationed in Gibraltar under NATO, I suggest that we should advise the Spanish that we are going to ask the Gibraltarian Government to raise a militia. That militia will be armed with EU passports and Gibraltarian ID cards and will guard our embassy in Madrid.

I have given the Minister notice of my next question. On 28th October I asked her noble friend Lord Whitty when a constitutional conference may take place on Gibraltar. He replied,

    "My Lords, as I understand it, the Gibraltar Government are making proposals. We have not yet received those proposals; they are not yet finalised. We do not envisage a conference in the sense to which the noble Lord refers. However, we shall consider seriously the initiative taken by the Government of Gibraltar. There are certain limits on the options in both the Treaty of Utrecht and the existing constitution".--[Official Report, 28/10/97; col. 973.]

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I wonder whether the Minister would be good enough to explain this extreme example of gobbledegook. I firmly believe that the time has come for a new constitutional conference and that this Government should formulate their own proposals for discussion rather than rely solely on the Gibraltar Government to make the agenda.

I have suggested in the past--and do so again now--that Spanish observers should be invited to observe such a conference in order that they are fully aware of our resolve that Spain has no legitimate aspirations to sovereignty of Gibraltar and that the expressed wish of the majority of the people of Gibraltar should be paramount, and that we will not put up with the current harassment techniques of Spain over Gibraltar and Gibraltarians. I believe that we should discuss these problems with the Spanish Government in every possible forum and make it clear that we are fully behind the people of Gibraltar over Spanish intransigence in these matters.

My noble friend Lord Bethell, whom I thank for introducing the debate, and my noble friend Lady Hooper spoke of Gibraltarian involvement in elections to the European Parliament. At present, they have no entitlement to vote. Given the number of voters there, it would be naive to suggest that Gibraltar should have its own representative. However, I should like to see one UK MEP constituency delineated to encompass Gibraltar so that voters could have the satisfaction of having had their say.

6.10 p.m.

Lord St. John of Bletso: My Lords, I, too, congratulate the noble Lord, Lord Janner of Braunstone, who unfortunately is not in the Chamber, on an outstanding maiden speech. I know that we shall hear a great deal more from him in the years to come. I have had a great deal of involvement with him as regards his interests in South Africa. I also thank the noble Lord, Lord Bethell, for introducing the debate. Having listened to the noble Lord, Lord Chesham, I do not agree that Gibraltar is a party political issue between the current Government and the previous government. I believe that both Governments have done everything in their power to defend the rights of Gibraltarians and therefore I do not believe that this is an opportunity to make party political gain.

Although the debate focuses on the problems faced by the inhabitants of Gibraltar, I should like to focus my comments on the practical options and measures that there are to defuse the stalemate with Spain and the potential that there is for the territory. I say "territory" because I believe that the time is past for referring to it as a colony. While I respect the long tradition of democracy and self government in Gibraltar and its right of self determination, I fear that the full potential of the territory can and will be achieved only when there is a negotiated solution through dialogue. Against the background of the United Kingdom Ministry of Defence accounting for the bulk of Gibraltar's GDP now providing less than 10 per cent. of GDP from the military presence there, I believe that the focus needs to be more on job creation and the promotion of the offshore financial centre, as well as on

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its huge potential for tourism. I was fortunate to be a member of the delegation which went to Gibraltar. It was led by the noble Baroness, Lady Hooper. I was amazed by the huge potential, but also at the sad state of disrepair of many of the hotels. Clearly, they are unable to survive without the increased tourist trade that is so desperately needed in the territory.

I was interested to read in a recent Financial Times supplement on Gibraltar that Peter Montegriffo, the trade and industry Minister, predicted that the financial sector, which now makes up 15 per cent. to 20 per cent. of GDP, should increase its share to one-third. He forecast that a further one-third would come from tourism, with the remainder in the public sector and from other activities such as shipping and bunkering.

While, arguably, the political difficulties with Spain may not be much of an impediment to the growth of the international financial centre in Gibraltar, with limited air and sea connections, Gibraltar's tourists are mostly day visitors crossing the border. Coupled with the delays in crossing the border, which several noble Lords have highlighted, there is a crippling effect on the growth of tourism.

I believe that the key to unlocking the current stalemate and to fulfilling the true potential of Gibraltar is the freeing and opening up of Gibraltar's airport to allow joint use. I believe that that is in the interests of all. That would certainly bring financial and social benefits both to Gibraltar and the adjacent area in Andalusia. There are many successful examples of the joint use of airports in other parts of Europe; for instance, Geneva and Basel, which operate under joint usage by two sovereign states.

In order for the offshore centre to be successful, it needs to be reputable, respectable and well regulated. I believe that the regulatory authorities of Gibraltar have gone a long way towards achieving those objectives. Since the cigarette smuggling and drug trafficking operations have been brought under control, I can see no valid reason why there should be any protracted delays on the border.

I support the words of the Chief Minister, Peter Caruana, in his recent address to the United Nations Fourth Committee, when he said:

    "Time cannot stand still for Gibraltar. We must progress onwards".

While the transfer of sovereignty is non-negotiable for the people of Gibraltar, I welcome the Chief Minister's desire for, in his words, "bridge building and fence mending" with the aim of achieving some European formula which can potentially be acceptable to Britain, Gibraltar and Spain.

I also believe that the time is right for constitutional reform in Gibraltar, possibly similar to the Guernsey model. The Treaty of Utrecht does not forbid a more modern political arrangement. I hope that in winding up the Minister can give some encouragement as regards the concerns of the noble Lord, Lord Bethell, and the noble Baroness, Lady Hooper, that Gibraltarians should have the right to take part in elections to the European Parliament.

In conclusion, I believe that it is in no one's interests to continue the current stalemate between Spain and Gibraltar. I favour a process of encouraging constructive

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dialogue, possibly linked to a timetable and, it is to be hoped, to a resolve on the airport, while like all other noble Lords respecting the rights of the people of Gibraltar to self determination.

6.18 p.m.

Lord Merrivale: My Lords, I, too, thank my noble friend Lord Bethell for initiating the debate. On 12th November during the Second Reading of the European Communities Bill the Foreign Secretary stated:

    "I invite the House to approve the Bill that puts the Amsterdam treaty into legislation with pride".--[Official Report, Commons, 12/11/97; col. 910.]

That may be so, but on 5th November at a meeting of the Foreign Affairs Committee, Gibraltar's Chief Minister expressed its fears regarding the frontier control of persons and provisions in the treaty which could enable Spain to continue to abuse immigration controls at the frontier as a means of creating unnecessarily long border queues. As noble Lords have mentioned, those are damaging for the economy.

The very rigid controls exercised by Spain on persons desirous of entering Gibraltar were referred to by the Leader of the Opposition. But in view of Spain's concern regarding the status of the territory in the European Union, the fears are not concerned with the nationality provisions regarding freedom of movement but are related to the position of the territory of Gibraltar itself for persons desirous for entering Spain through the Gibraltar-La Linea border. Can the Minister satisfy the House that those fears are unfounded or that the Government will take action if need be?

I should like to turn now to what I would call the theme of this year's National Day on 10th September; namely, self-determination and decolonisation. On 26th March of this year, the noble Baroness, Lady Chalker, wrote to me saying that the Government support the principle or right of self-determination for the people of Gibraltar. But she mentioned too the limitation of Gibraltar's options which would have to be compatible with the Treaty of Utrecht and workable in practice. Can the Minister confirm that a formula which would give Gibraltar a status similar to that of the Channel Islands would not infringe on the terms of the Treaty of Utrecht; in other words, an improvement of the constitution along the lines of a Crown dependency which would also not require the agreement of Spain. In that case, two recent unpopular statements could be avoided in the future; namely that,

    "Spain is one of the key players in the settlement of a long term status for Gibraltar",

and, regarding decolonisation,

    "We want to do a deal with the Government of Gibraltar and then cover the Spanish dimension on a bilateral basis".

To conclude, in view of the Foreign Secretary's firm stand in Luxembourg last week with regard to a Spanish attempt to winkle out back-door concessions over sovereignty, the Government might now consider more favourably the assertion that the Rock's status is a Gibraltar/United Kingdom matter.

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6.22 p.m.

Lord Goodhart: My Lords, I have some hesitation in congratulating the noble Lord, Lord Janner of Braunstone, on his maiden speech. I say at once that my hesitation is due solely to the fact that as a parliamentary novice who delivered my own maiden speech only a week ago, I regard it as somewhat presumptuous to congratulate such an experienced and distinguished parliamentarian as the noble Lord. However, I listened to his maiden speech with great pleasure and admiration. I believe that his proposal for a Gibraltarian delegate to the Parliament of the United Kingdom is interesting and deserves consideration.

The people of Gibraltar clearly have a right to self-determination. The United Kingdom is a party to the international covenant on civil and political rights. Article 1 of that covenant states clearly that all peoples have the right of self-determination. By virtue of that right, they freely determine their political status and freely pursue their economic, social and cultural developments.

The people of Gibraltar are a people with a distinct identity. They are neither part of the people of Britain nor part of the people of Spain. They are the people of Gibraltar. The fact that the United Kingdom failed to obtain the consent of the people of Hong Kong for the return of that territory to China is no reason for refusing to recognise the rights of the people of Gibraltar.

The right of self-determination can be exercised by the people of Gibraltar in a number of different ways. As has been pointed out, independence is not a realistic option. It is probably contrary to the Treaty of Utrecht and at the present time it is not sought by the people of Gibraltar. But the people of Gibraltar can seek a greater degree of autonomy than they have at present while remaining subject to the sovereignty of the United Kingdom. By contrast they could seek full integration with the United Kingdom, again, of course, subject to the consent of the people of the United Kingdom.

Indeed, they could seek association or integration with the Kingdom of Spain. Spain is fully entitled to try to persuade the people of Gibraltar to become part of Spain. If it so wishes, Spain is entitled to offer inducements for that purpose such as special status, as was done by China in the case of Hong Kong. Indeed, if the union of Gibraltar with Spain was the bona fide wish of the people of Gibraltar, the United Kingdom would have no right or reason to object to it.

But Spain, clearly, should not use harassment to force the people of Gibraltar into an unwilling union. Many forms of harassment are currently being used. First, there is the go-slow at the La Linea border crossing; secondly, the restrictions on the access to the airport; thirdly, the refusal of the right to run a ferry from Algeciras to Gibraltar; fourthly, the refusal to recognise Gibraltar's international direct dialling code; and fifthly, the refusal to recognise the identity cards of the people of Gibraltar as valid travel documents for entry into Spain.

Because of the problems with tobacco smuggling, there may be some justification for car searches at La Linea being more thorough than at other border

26 Nov 1997 : Column 1049

crossings into Spain. But even so, the long waits imposed from time to time at that border crossing are completely unjustified. Indeed, a number of the restrictions appear to contradict the law of the European Union. One draws the clear inference that at least one purpose--probably the principal one--of the imposition of restrictions is to try to force the people of Gibraltar into a union with Spain by making life sufficiently uncomfortable to make them change their minds.

Gibraltar should not be dog in the manger about its own position. It may well be that a Spanish terminal at the airport, which would permit travellers to southern Spain to avoid going through Gibraltar customs and immigration, would be a practical and sensible step. It was certainly one which was agreed to by the United Kingdom and Spain in 1987. At that time the Government of the United Kingdom was led by the noble Baroness, Lady Thatcher, someone not inclined to make concessions to foreign countries when those concessions were not justified or, indeed, sometimes when they were justified. In any event, it is true that Gibraltar was entitled to reject the agreement reached between the governments of the United Kingdom and Spain. But certainly I would welcome reconsideration of that decision.

Be that as it may, the Spanish restrictions in force at the moment are not justified as a matter of international law nor are they justified by any acts or omissions of either of the governments of the United Kingdom or Gibraltar. Therefore, I hope that Her Majesty's Government will use all reasonable means to persuade the Government of Spain to withdraw those restrictions which can only do damage to the goodwill between Spain and this country and between Spain and Gibraltar.

6.30 p.m.

Lord Moynihan: My Lords, I, too, thank the noble Lord, Lord Bethell, for introducing the debate. It is only on such a significant subject that I feel able to trouble the House with a second speech in one day. However, it provides me with the personal pleasure of congratulating the noble Lord, Lord Janner, on his maiden speech. It was incisive, superbly delivered, deeply felt and clearly thought through. It had all the hallmarks of the noble Lord's previous incarnation in another place. Consequently, the noble Lord has today demonstrated the art of seamless transition. As he put it, and if I may be so bold as to agree, it bore all the finest hallmarks of an hereditary principle.

One factor shone through the contributions to the debate. Gibraltar is unique--unique because of the combination of its geography and status and the resultant problems that its inhabitants face.

The special position of Gibraltar is reflected in the diverse ethnic and cultural heritage of the people, of which they are rightly proud. They are rightly proud, too, of their long tradition of democracy and self-government, which enables them to meet the challenges that they face today.

As my noble friend Lord Bethell made clear, there is agreement between both parties on the United Kingdom's policy towards Gibraltar, which is guided by

26 Nov 1997 : Column 1050

the twin precepts of the Treaty of Utrecht and the 1969 constitution. It is enshrined in the preamble to the 1969 constitution, and the Government are wise to stand firmly by their commitment to the people of Gibraltar, that we will never enter into any arrangement whereby they would pass under the sovereignty of another state against their freely and democratically expressed wishes. I am sure that the Minister will have no hesitation today in repeating our assurance to the people of Gibraltar that its future, including the issue of sovereignty, must be a matter for the population as a whole.

That assurance is vitally important. As noble Lords well know, the status of Gibraltar has been a matter of disagreement between the United Kingdom and Spain for nearly 300 years--ever since the rocky promontory at the foot of the Iberian Peninsula ceded to the United Kingdom in perpetuity under the terms of the Treaty of Utrecht.

Spain has always laid claim to Gibraltar, and has sometimes used notoriously hostile tactics in stating its assertion of sovereignty to the Rock, culminating in General Franco's unilateral decision to close the border between Spain and Gibraltar in 1969, effectively severing links between the Rock and the mainland for over 13 years.

Despite the Brussels process established in 1984 to discuss a range of Gibraltar-related issues, including sovereignty, the people of Gibraltar are still beset by an unsubtle blend of restrictions contrived by Spain. For example, at the beginning of this year, Spain again indicated that it would refuse to recognise British passports issued in Gibraltar. The then Foreign Secretary, Malcolm Rifkind, intervened to secure written assurance that Spain would not re-open this issue and the possibility that Britain would take the matter to the European Court of Justice if Spain reneged on its promise was not ruled out. Indeed, that assurance that Spain would never question the right of Gibraltarians to free movement within the European Union and will not do so in future was repeated to the Foreign Secretary at the General Affairs Council on 2nd June. I know that the Minister will commit the Government to taking whatever action is necessary to ensure that Spain respects that right.

Furthermore, at the same time Spain informally floated proposals for joint sovereignty over Gibraltar, which the then Foreign Secretary rightly dismissed on the ground that such a proposal did not have the consent of the people of Gibraltar. I hope that the Minister will today guarantee that the Government will continue the previous Administration's policy of quiet diplomacy combined with firm action where necessary.

It is certainly the case that Spain has it within her power to make life unpleasant for the people of Gibraltar in the single-minded pursuit of the ultimate goal of sovereignty. Spain is also not above using Gibraltar as a pawn in her separate disputes with the United Kingdom--for example, sudden cases of customs and immigration working to rule, resulting in four or five hours' delays to cross the border, have been known to take place during fishing disputes between the two countries.

26 Nov 1997 : Column 1051

Thus, Spain continues to create practical difficulties for Gibraltar, as we heard described so eloquently, particularly in the clear list given to the House by the noble Lord, Lord Goodhart. Against those practical difficulties, and given Spain's record on Gibraltar, does the Minister agree with the 10,000 Gibraltarians who, on 13th May this year, presented a petition to the Governor for the Prime Minister that, as British citizens of the European Union,

    "the policies of the Government of the Kingdom of Spain amount to a blatant disregard and denial of [their] fundamental rights"?

Quite apart from the understandable view that that represents--namely, the utter void of political and diplomatic ethics--those blockades and restrictions have serious practical consequences for the people of Gibraltar. As a result, Gibraltar exists in a state of relative economic siege, its development impeded and its potential unfulfilled.

I am sure that, along with the points made by the noble Lord, Lord St. John of Bletso, the Government will apply the policy of active encouragement and assistance pursued by the previous Administration in order to help Gibraltar create a base for itself in tourism and banking, for insurance and for other financial services, particularly since, 10 years ago, the Ministry of Defence accounted for some 65 per cent. of Gibraltar's economy; now that is closer to 6 per cent.

The previous Government also encouraged, cajoled and sometimes insisted that Gibraltar take a firm line to clamp down on drugs and tobacco smuggling, for which the Rock was developing a reputation. The Government of Gibraltar responded with very tough and effective measures in line with United Kingdom and European Union standards. Strict, "all-crimes" money laundering legislation, designed to increase investor confidence in Gibraltar, came into effect on 1st January 1996. Today, Gibraltar is proud that illegal drug trafficking and smuggling in the waters around the Rock is now largely consigned to history. That has put an end once and for all to the unproven Spanish allegations that the colony is used as a centre for land-based drugs and it emphasises the need for cross-border co-operation with Spain rather than confrontation. However, Spain's continued intransigence threatens to choke the economic potential of Gibraltar. I hope that the Minister will agree that it is the Government's responsibility to ensure that that does not happen.

I now wish to turn to the area of self-determination and sovereignty, an issue which the people of Gibraltar see as key to their future. I believe that everyone who has spoken in the debate recognises this as a difficult and complicated issue. Will the Government continue the previous Government's policy which fully supported the principle of self-determination so long as it is exercised in accordance with the other principles and rights in the United Nations Charter, as well as other treaty obligations?

In the case of Gibraltar the right of self-determination is circumscribed by Article 10 of the Treaty of Utrecht. That means that Spain effectively has the right of first refusal if the United Kingdom were ever to relinquish

26 Nov 1997 : Column 1052

sovereignty. That means that independence for Gibraltar can therefore become a reality only with Spanish consent.

However, the Chief Minister of Gibraltar has argued that the,

    "right to self-determination of colonial people is a fundamental right"

and has asserted a "two flags, three voices" principle for negotiations on Gibraltar's future constitutional status, declaring that,

    "there can be no progress in resolving our differences with Spain if they continue to insist the matter must be resolved bilaterally between the United Kingdom and Spain, thus denying us our fundamental human right of self-determination".

This is a sensitive and difficult issue. However, I wish to ask the Minister for a statement of the Government's policy with regard to the principle of self-determination as a fundamental human right, and their obligations as circumscribed by the Treaty of Utrecht, particularly in the light of the Government of Gibraltar's proposals for a constitutional status similar to the one enjoyed by the Channel Islands.

I now wish to turn to another issue about which the people of Gibraltar--and clearly from this debate, your Lordships' House--feel extremely strongly; namely, the issue of a franchise for the European Parliament elections. We recognise that that is an issue of deep concern for the people of Gibraltar, particularly since the recent extension of the co-decision procedure under the Amsterdam Treaty which gives the European Parliament a far more extensive role in the process of legislation which Gibraltar is subsequently required to transpose into domestic law and implement.

However, we also recognise the formidable practical difficulties in resolving this issue, in that any alteration to the status quo would require the agreement of all member states, including Spain. I should therefore like to ask the Minister for a statement of government policy on provisions to allow Gibraltarians to vote in European Parliament elections, and to have a separate representative in the European Parliament under the EC Act on direct elections. Would the Government encourage the involvement of the European Commission of Human Rights on this issue? Furthermore, what is the Government's policy on Peter Caruana's proposal to include Gibraltar in a United Kingdom region under the European Parliamentary Elections Bill?

There are two other areas where Gibraltar's interests are potentially compromised by the actions of government. With the permission of your Lordships' House, I should like to have clarification of the Government's position on both these areas. The first concerns Spain's decision to participate fully in NATO's integrated military structure under NATO's internal adaptation process. Ironically, but not surprisingly, Spain has always sought to exclude COMGIBMED, the NATO base in Gibraltar, from NATO exercises, and refuses to allow NATO's ships and aircraft to enter Spanish ports and airports if they have come directly from Gibraltar. However, on behalf of the Opposition I should like to express our full support for any efforts to bring Spain back into the

26 Nov 1997 : Column 1053

integrated structure of NATO, but with the firm caveat that this cannot be at the expense of the interests of Gibraltar, to whom we have given assurances.

On this side of the House, we support the statement given by the Prime Minister on returning from the NATO summit in Madrid that,

    "while [the Government] want to see Spain contributing fully to alliance security, we are determined to ensure that the interests of Gibraltar are fully safeguarded in the process".

When asked on 7th July whether the Government would block Spain's entry into NATO's military command structure, the Foreign Secretary said,

    "Yes we can and yes, we will, unless there is an agreement".

I would therefore like to ask the Minister whether it is still the firm position of the Foreign Secretary to defer agreement at the December ministerial meeting on Spain's integration into NATO's military command structure unless the current Spanish restrictions on the movement of military aircraft in and out of Gibraltar are dropped, given that NATO decisions must be reached by consensus.

The Prime Minister also said,

    "We have made it clear to the Spanish Government, tactfully but firmly, that a necessary part of ensuring any new command structure that involves Spain is in place is that we should resolve the questions over the airspace".

That is not my choice of syntax, but I would ask: how does the Minister envisage resolving this question and reaching agreement, since the Spanish Foreign Secretary, Senor Abel Matutes, has been reported as saying that Madrid will not lift any restriction that could affect Spain's legitimate demands of sovereignty over Gibraltar? What discussions have been held with our NATO allies on this issue and, in particular, the United States?

I should like to turn to the second area, which my noble friend Lord Chesham also raised, where Gibraltar's interests are potentially compromised by the Government, namely the Treaty of Amsterdam. I should like to ask the Minister if she would clarify the issue of Article 4 of the Treaty of Amsterdam. It is my understanding that as a result of negligence on the part of the Foreign Secretary a late amendment by the Spanish Prime Minister was accepted into the treaty by default in the early hours of the morning of 18th June, meaning that any member state, including Spain, would have a veto over future opt-ins to the Schengen agreements. Future opt-in will now be decided by unanimity rather than by qualified majority voting. The Prime Minister himself told us:

    "What we have secured, which is important and is a better way of going about things, is what I call an opt-in ... we have the power within the Treaty to go into any of these areas if we want to. If we do not want to, we need not, but if we do no other country can block us going in".

Is this statement correct? The Foreign Secretary has since described the episode as a misunderstanding and has complained about the note-keeping of the Dutch presidency; so if the Prime Minister's statement is not misleading then what was the misunderstanding to which the Foreign Secretary has referred? I should like to ask the Minister why the Foreign Secretary failed to

26 Nov 1997 : Column 1054

challenge the late amendment. It is no wonder the Government of Gibraltar fear that, as a result, Spain has a powerful bargaining chip with which to exact concessions on Gibraltar.

The people of Gibraltar are determined to remain British. It is a fact that Spain's policy of confrontation rather than co-operation only serves to make Gibraltar more defiant of Spain. Gibraltar is capable, ready and willing to make an important contribution to the prosperity and well-being of all the people living in the region, in an atmosphere of contribution in mutual co-operation. It is in Britain's interests to have a constructive relationship with Spain, including issues surrounding Gibraltar. It is in Spain's interests to have a constructive relationship with both Gibraltar and the United Kingdom. I should therefore like to express our support for the efforts of the Government to achieve these goals, providing they follow a continued policy of quiet diplomacy combined with clarity of vision and steadfast determination to protect the interests of the people of Gibraltar.

6.44 p.m.

The Parliamentary Under-Secretary of State, Foreign and Commonwealth Office (Baroness Symons of Vernham Dean): My Lords, I too would like to thank the noble Lord, Lord Bethell, for providing this opportunity to discuss the important question of Gibraltar. We have had a wide-ranging debate and many questions have been raised, some of them very detailed. I shall do my best to answer questions raised by noble Lords and if I do not manage to answer all of them I hope that noble Lords will be willing to accept letters in answer to points that I am not able to cover now.

I congratulate my noble friend Lord Janner of Braunstone on his maiden speech. If I may say so, it was a speech containing a great wealth of parliamentary experience, illustrated by his eloquence and his persuasiveness. It is a great pleasure to have heard him and also a great pleasure to greet him as a Member of your Lordships' House.

Gibraltar is unique, not only because of its history and its geographical position but also because it is the only British dependent territory within the European Union. The people of Gibraltar have much to be proud about: their distinct identity as a people, which is a unique blend of the Mediterranean and the British; their links to the United Kingdom; the warm affection between the people of Gibraltar and the people of Britain; and their tradition of parliamentary democracy, of the rule of law and of an independent judiciary. All those contribute to the richness and diversity of life on the Rock.

Gibraltar can be proud, too, that the Rock's geographical position at the crossroads of two continents, where the Mediterranean meets the Atlantic, makes it one of the landmarks of the world. As the noble Lord, Lord St. John of Bletso, reminded us, the territory is a place of special interest for tourists, and Her Majesty's Government support the efforts of the Government of Gibraltar to take advantage of the Rock's natural heritage to build up the tourism sector.

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The increase in funding allocated to tourism in the last budget, the strengthening of the Ministry of Tourism, the opening of the new cruise liner terminal last month and the beautification of Main Street are just some examples of the progress made in this important area.

These efforts underline the good progress made in diversifying the economy at a time when the economic base has narrowed because of the rundown in the United Kingdom's defence facilities. In that context, it was welcome news that the job losses announced by the Ministry of Defence last April turned out to be fewer than expected. The economy has nonetheless undergone a major transformation from the public to the private sector. We are pleased that the Government of Gibraltar has recently appointed a new operator (Cammell Laird) to take over the running of the ship repair yard. That should create new jobs in a sector of continuing importance to Gibraltar.

The noble Lord, Lord St. John of Bletso, and the noble Lord, Lord Moynihan, spoke about the development of the financial services sector, which is another element in the transformation. Steady progress is being made here too. The British Government were pleased earlier this year to be able to authorise Gibraltar to passport insurance services into the rest of the European Union. That was an important step for Gibraltar. We hope that other sectors, notably banking, will follow soon. To help this process, we have funded a number of staff for the financial services centre. We were pleased, too, that an invisibles seminar hosted by the City of London was held on board the Royal Yacht in July to launch Gibraltar as a financial services centre. That boosted the profile of Gibraltar.

Gibraltar can take credit for its improved international reputation, which has come about as a result of the decisive steps taken to deal with the problems of drug and tobacco smuggling. The Government of Gibraltar have passed primary legislation to license the tobacco trade. They will shortly introduce legislation to ban fast boats. Gibraltar's involvement in the transportation of contraband and drugs from Morocco to Spain was an unsatisfactory situation which was met with firm action. The problems of illicit trafficking have now virtually disappeared. The British Government and the Government of Gibraltar are determined to keep it that way.

As the noble Lord, Lord Moynihan, said, it was important too that Gibraltar tackled the potential threat posed to its financial centre by money-laundering. That has been achieved by putting in place effective regulatory mechanisms to UK and EU standards. We welcome the Government of Gibraltar's decision to accept the recommendations of the financial action task force, the main intergovernmental body drawing up internationally accepted standards in the fight against money-laundering. The transformation of Gibraltar's reputation over the last two years is an important element in Gibraltar's efforts to develop as an offshore financial centre.

As ever, there is a lively political debate in Gibraltar over a number of specific issues. I should now like to pick up some of these issues in more detail.

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One of the issues high up the political agenda at present is the constitutional debate about the future relationship with Britain. Before addressing that, I should first like to reiterate the commitment of the Government to the people of Gibraltar enshrined in the 1969 constitution. As my right honourable friend the Prime Minister has made clear, the British Government will never allow the people of Gibraltar to pass under the sovereignty of another state against their freely and democratically expressed wishes. That is not empty rhetoric. It represents a fundamental safeguard for the people of Gibraltar. I was specifically asked by the noble Lord, Lord Moynihan, to make that undertaking; I am happy to restate it today. The noble Lord, Lord Bethell, expressed some doubts about Spain's acceptance of that position. Our message has been clear. Of course, a message delivered is not always a message received.

On constitutional change, the position of the British Government remains as set out by my honourable friend the Minister of State, Mr Henderson, during his visit to Gibraltar last month. We have an open mind and are willing to consider any proposals from the Government of Gibraltar; but they should be realistic and compatible with the Treaty of Utrecht. We are waiting to see the proposals of the Government of Gibraltar. We do not believe it is helpful to speculate before we see them because we need to look at the details.

As for the points raised about Spain's consent to constitutional change, the constitutional position of Gibraltar is a matter for the United Kingdom and Gibraltar, provided it does not breach the Treaty of Utrecht. But we all know that Spain is Gibraltar's immediate neighbour and it is obvious that the Spanish dimension must be taken into account.

I was asked questions about the proposals for joint sovereignty, particularly by the noble Lord, Lord Moynihan. Any proposals for joint sovereignty would need to have the consent of the people of Gibraltar. We stand by the commitment in the 1969 constitution to respect the wishes of the people of Gibraltar in that regard.

The noble Baroness, Lady Hooper, raised questions about the review of dependent territories announced by my right honourable friend the Foreign Secretary. Gibraltar's circumstances are different to those of the other dependent territories, given the EU and Spanish dimensions. Any proposals from Gibraltar for constitutional change will have to be handled outside the review. Nonetheless there may be lessons for Gibraltar that emerge from the review. I am pleased, therefore, that Peter Caruana, the Chief Minister of Gibraltar, will address the Dependent Territories Association next February when the results of the review will be announced by my right honourable friend the Foreign Secretary.

I am happy to turn now to the issue of self-determination, as I was urged to do by the noble Lord, Lord Moynihan. Self-determination is another topical subject high up the political agenda on the Rock. We support the right or principle of self-determination for Gibraltar, reflecting the wishes of the people

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concerned. But we believe that it must be exercised, as the noble Lord said, in accordance with the other principles in the United Nations Charter and with treaty obligations. In the case of Gibraltar, we all understand that that includes the Treaty of Utrecht. In practice, therefore, independence for Gibraltar could only become a reality with Spanish consent.

The Government believe that dialogue and co-operation, rather than confrontation, are the only sensible way forward. The Brussels Process talks, the mechanism established in 1984 for regular dialogue with Spain about Gibraltar at foreign minister level, offers a suitable forum. We continue to believe that the Brussels Process can bring about increased practical co-operation and contribute to confidence building. In response to the specific question raised by the noble Lord, Lord Bethell, we hope that the Chief Minister of Gibraltar will be involved in the Brussels Process meetings. We believe it is only right that he should be present in order to express the views of Gibraltarians.

I know too that there is concern on the Rock over the negotiations about NATO restructuring. Those concerns have been raised in your Lordships' House this evening. We are determined to ensure that the interests of Gibraltar are safeguarded in those negotiations. We shall not accept Spanish command over the territory of Gibraltar.

I was asked specific questions by the noble Lord, Lord Chesham, about Her Majesty's Government's attitude to Spanish integration into NATO. We welcome Spanish entry into an integrated command structure in NATO. We should like to have with Spain the relationship that we have with other NATO allies. But some of the restrictions imposed by Spain on military activities in the Gibraltar region are, in our view, inconsistent with such a relationship. We are discussing these at present with the Spanish Government. I am sure that noble Lords will understand my reluctance to go into detail on our precise position when we are in the middle of a very sensitive negotiation.

The noble Lord, Lord Bethell, said that Gibraltar was within the European Union as part of UK membership by virtue of Article 227(4) of the Treaty of Rome. Gibraltarians are rightly proud of their European identity. Being part of the EU brings rights as well as responsibilities. A fundamental right is that to freedom of movement, which Gibraltarians enjoy within the EU. The Spanish Foreign Minister has given an assurance that Spain has never, and will never in future, question the right of Gibraltarians to freedom of movement in the EU. We shall hold Spain to that assurance. Another benefit from the EU is the financial assistance which can be made available. In that context the British Government were pleased to have secured for Gibraltar over £15 million in EU structural funds.

There has been understandable unease and concern in Gibraltar over the Amsterdam Treaty. This too was a subject touched upon by a number of noble Lords in our debate. The essential points are that the Treaty of Amsterdam does not affect the right of Gibraltarians to free movement within the European Union, including across the border with Spain; nor does the treaty give

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Spain any new rights to impose controls at the border. Gibraltar's rights are enshrined in the EC treaty. In no way have they been undermined by Amsterdam. The British Government will defend them vigorously if any member state disregards them.

The noble Lord, Lord Chesham, and the noble Lord, Lord Moynihan, raised questions about what had been said by my right honourable friend the Foreign Secretary. I can do no better than refer to yesterday's Hansard of another place at col. 754. My right honourable friend there explained what had happened at Amsterdam in considerable detail. He finished his answer by saying that the main gain for Britain from the Amsterdam Treaty was that it achieved a clear legal foundation for the border controls and such a clear legal foundation was never obtained by the Conservative Party in 18 years.

Although the Gibraltar Government are responsible for giving effect to EC legislation in the territory, the UK is answerable to the European Court of Justice for the implementation and enforcement of EC obligations in Gibraltar. We therefore welcome the steady progress made by the Government of Gibraltar in tackling the backlog of EC legislation.

The noble Lord, Lord Bethell, and the noble Baroness, Lady Hooper, raised questions about voting rights in Gibraltar in the European Parliament elections. Gibraltar's lack of representation in the European Parliament results from Annex II of the 1976 EC Act on direct elections. The effect of Annex II on the 1976 Act is to restrict the application of the Act to the UK itself, to the exclusion of other UK territories such as Gibraltar, the Channel Islands and the Isle of Man, to which the EC treaties apply in part. Amending Annex II would require the unanimous agreement of all EU member states. However, the Government are aware of the strength of feeling in Gibraltar on that issue.

As the noble Lord, Lord Moynihan, said, there are real legal and practical difficulties in the way of any change in the present position on voting in the European Parliament elections. But Gibraltarian views in the EU are fully represented by the UK Government. We ensure, as I am sure did our predecessors, that the interests of Gibraltar are taken into account in negotiating new legislation. We are determined to uphold Gibraltar's rights in the EU and, where it has been necessary, we have taken action to ensure that.

The noble Lord, Lord Janner, raised the question of Gibraltarian MPs at Westminster. There would be substantial political, legal and practical problems in any such proposal. No dependent territory is entitled to an MP at Westminster since none is part of the United Kingdom. The interests of their voters are quite different from those of UK voters. We believe that they are better served by their own local legislators.

The noble Lord, Lord Bethell, raised the question of the airport. The 1987 joint declaration was not implemented because of strong opposition in Gibraltar itself. Until the declaration is implemented, Spain will continue to block EC air liberalisation applying to Gibraltar. That includes the opening up of new routes to and from Gibraltar.

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The noble Lord, Lord Bethell, also raised questions relating to EU tax harmonisation. The tax code is part of a package of tax harmonisation measures currently under discussion by member states and will take the form of voluntary, non-statutory and non-binding political agreements. It is at this stage too early to say what its effect will be on Gibraltar because negotiations on the code are continuing in Brussels. However, we are in contact with the Government of Gibraltar and the Chief Minister has been consulted and kept informed during the negotiations. I am not in a position to go into greater detail at this stage.

Many noble Lords, understandably, raised the difficulties there have been over border delays, particularly the noble Lords, Lords Bethell, Lord St. John of Bletso, Lord Merrivale and Lord Goodhart. We welcome the reduction in delays that we have seen at the border following British representations to the Spanish Government. We all understand that Spain has a duty to deploy sufficient staff to ensure a smooth flow across the frontier. But we will continue to raise the question of border delays with the Spanish authorities where they are clearly excessive. We believe that on occasions some of the delays have been politically motivated and we are addressing that issue at a political level.

I was also asked a number of questions--notably by the noble Lords, Lord Chesham and Lord Goodhart--about what Her Majesty's Government can do in relation to Spain's refusal to recognise Gibraltar's international dialling code. It is true that Spain refuses to recognise Gibraltar's international dialling code, which means that no telephone calls can be made to Gibraltar from Spain using that code. At the moment there is a pragmatic solution whereby Gibraltar is allocated certain numbers within the internal Spanish code for Cadiz. That limits Gibraltar to 30,000 numbers that can be dialled from Spain and those are now almost exhausted. Earlier this year the Commission proposed a practical solution; that is, the adoption of the UK 44 dialling code for Gibraltar-Spain traffic. But so far the Government of Gibraltar have refused to accept that. We continue to press the Commission to urge Spain to enhance the Cadiz telephone exchange to allow Gibraltar access to a greater number of telephone lines.

I was also asked, particularly by the noble Lord, Lord Chesham, to direct my attention to the remarks made by my noble friend Lord Whitty. My noble friend's remarks were in response to a question from the noble Lord, Lord Merrivale, about constitutional change. We do not believe that other member states would want to be involved in that debate. Seeking their support as a counter-balance to Spain would therefore clearly be ineffective. But where Gibraltar's EU rights are called into question by Spain or any other member state, we of course seek the support of our European partners as a counter-balance. I hope that there is no misunderstanding on that point.

It will be clear from my earlier remarks and the answers that I have tried to give to noble Lords' questions that we are working closely with the Government of Gibraltar to address the problems faced by its people. As a small, democratic, dependent

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territory in Europe, Gibraltar is seeking to modernise its economy, despite problems arising from the sovereignty dispute with Spain. Gibraltarians are meeting that challenge with typical resourcefulness and resilience. The British Government's objective is to work to achieve a future for Gibraltar that is both prosperous and secure. There will be many difficult decisions and problems to face in the years ahead. The important thing is that Britain and Gibraltar should work together, as in the past, to find sensible and reasonable solutions. The British Government's commitment to Gibraltar set out in the preamble to the 1969 constitution remains the keystone of that co-operation.

7.7 p.m.

Lord Bethell: I thank all those who have spoken in the debate, in particular the noble Lord, Lord Janner, who gave a most sensitive and interesting maiden speech. How well I remember his father, Barnett Janner, who was an eloquent Member of another place and of your Lordships' House. I trust that that line of succession will be maintained from generation to generation.

I am also grateful for the good luck that I had to draw the ballot for this debate at this timely moment. I thank the Minister for answering so many points with her usual skill and care. However, I observe that when she says that Gibraltar could not become independent without Spain's consent, she is saying something which has not legally been tested. I have seen legal opinion which states a different view--that is, that Gibraltar could become independent under the British Crown and still remain within the terms of the Treaty of Utrecht. I do not know whether it will ever come to that but there are differences of view in that regard.

I was disappointed with what the Minister said about Gibraltarians being unable to vote in June 1999. It is all very well saying that a change in Annex II would require the unanimous consent of the member states. That argument only appeared in Foreign Office briefs after 1995. Before that, those of us who inquired about the point, were given other reasons why Gibraltarians should not be allowed to vote. But this new reason appeared a couple of years ago. I do not believe that it should deter the Government from having a go at changing the matter and putting the matter right. It may be that Spain would veto the point; but until we do it, we do not know that Spain would. If Spain were to veto that point and refused the franchise to Gibraltarian citizens, it would be a disgrace--I hope the noble Lord, Lord Garel-Jones, would agree with that--and a shocking denial of democracy. I hope that the Minister will look at that point and write to me about it. I have no doubt that the matter will be raised in this House, if nowhere else, under the appropriate legislation and I trust that my noble friend Lady Hooper will support that as well.

I thank all those who took part in the debate. I beg leave to withdraw the Motion for Papers.

Motion for Papers, by leave, withdrawn.

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